Cameron’s euro dilemma

It’s in Britain’s interests to be more involved in Europe

Take a leap of faith. Assume that, despite the woes in Greece, Italy and elsewhere, the roughly sketched out eurozone rescue plan succeeds in saving the currency union, in some form. Assume that the eurozone, whoever is in or out, is set decisively on the path of closer fiscal union and collective debt liability. Assume that all the consequent decisions about eurozone structural reform and the difficult political adjustment required are put in place. If the euro crisis is to be resolved in the long term, these things have to happen. Where does this leave Britain?

For most British Eurosceptics, the fact that Britain has found itself drawn into supporting the troubled eurozone, either through the International Monetary Fund or directly, as it has with the Irish bailout, is the unacceptable price of European union. Euroscepticism has been the majority view in the Conservative party for the last 20 years, but it is now the unanimous view, Kenneth Clarke notwithstanding. October’s parliamentary revolt by backbenchers over a referendum on British membership of the European Union was chiefly a disagreement over tactics, not principle, that divides a Eurosceptic government from its extremely Eurosceptic dissenters.

YOU'VE HIT THE LIMIT

You have now reached your limit of 3 free articles in the last 30 days. But don't worry! You can get another 7 articles absolutely free, simply by entering your email address in the box below.

When you register we'll also send you a free e-book—Writing with punch—which includes some of the finest writing from our archive of 22 years. And we'll also send you a weekly newsletter with the best new ideas in politics and philosophy of culture, which you can of course unsubscribe from at any time

Email

Prospect takes your privacy seriously. We promise never to rent or sell your e-mail address to any third party.
You can unsubscribe from the Prospect e-mail newsletter at any time.

Comments

Matthew

Cogito Dexter

November 17, 2011 at 11:37

"This means—counter-intuitively for Conservatives—helping to strengthen the hand of the European Commission in the coming debate, and using existing Brussels institutions more, not less, in order to build alliances to counterbalance the weight of the eurozone bloc."Your argument is bound to be manna from heaven to those who love 'big state' and power to unelected mandarins, but for Britain the best that can be said about your proposition is that it is the 'least worst' of the options you're prepared to countenance.For me, the opportunity dividend of backing away from the EU into an EFTA relationship with Europe includes the doing-away with inexorable sovereignty creep and overbearing and costly regulation. It would allow us to set our own terms of trade to our best advantage, and make no mistake, it's only trade that makes money, not regulation.

Eurozone crisis: live blog | The World | International affairs blog from the FT – FT.com

Derek Emery

November 17, 2011 at 11:50

Look at the EU in for the long term.
The money engine is Germany. All of the EU has ageing demographics that mean a dwindling workforce supporting a booming retired class. The lowest birth rate is in Germany so long term where is EU money to come from? Immigrant will never take on the Germanic attitudes that support their industry. Growth in the EU will be low because of debt and a disinterest in competing in the rest of the world. Within a decade ageing demographics will be having a much bigger negative effect.
Growth in the rest of the world is close to 10% whereas in the EU it is nearer 1-2%. A decade of growth at 10% makes the economy 2.5 times bigger. The EU economy will be increasingly unimportant in Global terms. The rest of the world is moving up the economic food chain and producing a professional class which will make much cheaper world beating products and services. The EU is likely to be increasingly priced out by a far bigger range of cheaper foreign products and services. It is doubtful the EU will be able to maintain its lifestyle where it costs several times as much to produce the same goods and services. There are massive economic changes in the offing where the EU is on the losing side just as the rest of the world will win out.

AndyN

November 17, 2011 at 12:03

"It assumes that British exporters are best served by waiting for standards and rules, set in Brussels, to be emailed to London so that they can comply with them."That's exactly what happens already, even with an army of bureaucrats supposedly going in to bat for us."This is what the EU feels like for free-trade partners like Norway."That would be the Norway whose economy was described by the OECD as "particularly resilient during the financial crisis with a relatively shallow recession". Yeah, they really suffered by not having a seat at that table.These are just two of the dozens of points I could pick out of this heap of bilge Mr Mandelson. Just give it up - you're demonstrably wrong about practically everything.

Ethan

November 17, 2011 at 12:04

Are you utterly insane? The answer to any crisis is always more EU? Just go away Mandy you've destroyed enough of my country already.Ps it was hilarious seeing Paxo destroy you the other day. You stated the Euro was a sustainable success and we should join immediately. Fast forward a bit and it's a total disaster. Then you tried to wriggle out of what you said. You must realise the games up Mandy when EVEN the BBC see through you. And they LOVE the EU more than you obviously do.

Alan Douglas

GaryBaldy

November 17, 2011 at 12:20

Mr Mandelson, you are effectively arguing that instead of heading for the lifeboats, after the Iceberg has been hit, we should head for the Bridge of the Titanic so that we can share in the decisions. For once would you please forget your EU pension and look at the bigger, World picture.

MattNW5

Barbara

November 17, 2011 at 13:16

You are paid to parrot'More Europe', so your opinion is tainted.
Can't we just dispense with this charade - we know this will be your standard answer to everything, at all times, so you don't need to keep on saying it.

Mark, Edinburgh

November 17, 2011 at 13:41

I find this emphasis on it being vital to be at the "trading standards table" is somewhat strange, coming as it does from a former EU trade commisioner.Don't most industries, ranging from oil and gas, to motors and electronics set their standards through international industry bodies, on which the EU, as opposed to the UK, now sits along with USA, Japan, China etc.?In fact the EU is simply our "rep" on the various international committees, rather than ultimate decider, and it then imposes the agreed international standards in the EU area.Whether it makes sense to ask the EU go on being our rep (as Norway does) or resume our own seat on these bodies (which our volume of international trade would justify) is merely a compromise between vital interest and admisnistrative cost.So in summary I think the trading standards argument is really a bit of a "canard".

Barry

November 17, 2011 at 14:02

"It assumes that British exporters are best served by waiting for standards and rules, set in Brussels, to be emailed to London so that they can comply with them. This is what the EU feels like for free-trade partners like Norway."Norway is a member of many intergovernmental bodies that are expressly set up to determine international policies and standards on all manner of things and as such carry substantially more standard setting authority than the EU.For Norway, Brussels is a convenient conduit for those internationally agreed standards (generally done under a UN banner of some description eg UNECE, or the World Health Organisation) but there is scope for Norway to introduce those standards direct from the intergovernmental body if they choose to. NOBODY expects Norway to withdraw from the UN or WHO or others so why persist with such a flimsy claim?"One regulatory regime is ultimately better than 27, even if it means making those rules collectively. "Without competition in regulations and a proper separation between competing units systemic risks are far more costly because they necessarily can affect a much, much larger system. The response to such problems is then slowed down by an over reliance on sclerotic centralised decision making.The damage isn't just from attempting a one size fits all solution either but comes earlier in the process - it is that there can only be one solution at a time coming from the centre and the centre must wait for sufficient feedback before deciding whether a policy is working. We have seen precisely this rapid spread of disaster and ungainly and distant decision making with the banking crisis.Collectivism is fine so long as it is by choice. Then you are free to take part, free to adopt those values if they chime with yours in working towards a goal and crucially, free to exit the community if it no longer suits your purpose.

Major Bonkers

November 17, 2011 at 14:22

Unbelievable. Are Mandelson and Ken Clarke the only two people who still believe that the way out of this hole is to keep furiously digging? It all reminds me rather of General Haig's philosophy, circa 1916: what we need is just one more big push to win the war - more men - more guns - and after the inevitable failure, double the figures and repeat, ad infinitum.We've had 30 years of ceding democratic accountability in return for (what Mandelson still describes as) 'influence'. Show us the benefits for 30 years-worth of Euro imposed socialism, and you'll carry the argument: but all the rest of us can see is the destruction of our fishing industry, huge carbon taxes, and a gravy train for French peasants, Italian mafiosi, and second-rate politicians (no offense).

Sandy Jamieson

The Meissen Bison

November 17, 2011 at 15:27

"Assume that...the... eurozone rescue plan succeeds"It won't."Assume that the eurozone...is set ...on the path of ...collective debt liability"No, I've tried but I can't manage to do that."Assume that all the ...decisions about eurozone structural reform and the difficult political adjustment required are put in place."Ha ha ha!"If the euro crisis is to be resolved in the long term, these things have to happen"Well there's a greater chance that you will marry my sister than that there will be a resolution to the Euro crisis, a catastrophe inflicted on a benighted Euroland by economically illiterate ideologues like Peter Mandelson.

Madasafish

November 17, 2011 at 15:54

This means—counter-intuitively for Conservatives—helping to strengthen the hand of the European Commission in the coming debate, and using existing Brussels institutions more, not less, in order to build alliances to counterbalance the weight of the eurozone block.In other words, centralise power to Brussels.. to an unelected Commission..Mr Mandelson is urinating into a hurricane.

magot fish

November 17, 2011 at 16:52

So far, I have read opinion of Peter Mandelson and the comment from Cogito Dexter. In my opinion the latter is the correct one. We joined the 'Common market' in the early 1970s and I recall the political comment at the time: Ted Heath claimed that he had a mandate because he was elected Prime Minister despite the fact that the Conservative party manifesto made no mention of joining that organisation. At that time, I recall that the Chancellor of Germany was Willie Brandt. Germany was also at that time the most powerful member of the common market, despite the protestations of the French government. Willi Brandt said that if Britain did not join the Common market the only sensible thing to do would be for the Common market to seek some agreement with the EFTA countries. In my opinion that is what should have happened then and I still stand by that. I contend that they would not have been one 10th of the trouble that they are now in if that had been the outcome. I am not in business any more, I do community work now, but my opinion has not changed at all. The European common market was designed to try to prevent Middle Europe from engaging in war in future, if you ask me. When we joined the Common market it caused my opinion that we heard Gifford hit exactly what he wanted and that opinion has been the same ever since. I can see no reason to change it. You may contend that the German people did not think very much of Willi Brandt. If you are asked their opinion of the present Chancellor I very much doubt if it would be as high as even that.The world is changing now and the balance of power lies with the Pacific. The reason? They have more people, who have to work for less money when you think of it that is the only way societies ever won this particular battle.There is a chain of thought which believes that the system must change. If it does, it will have to be a great deal more equal throughout the world.

harmonicaman

November 17, 2011 at 17:55

The wilful blindness of the EU apologists is astonishing. Democracy maters not to the EU, they have usurped two elected leaders so far, Mandy no doubt has no problem with stifling democracy, but then no doubt he sees himself partying with champagne and caviar in his dascha while the plebs queue for bread. The mans is one of a disgraceful cabal, images of Caucescu will come to many minds if this lot are not careful.

J Huddleston

November 18, 2011 at 18:38

Looks like we're going to have to buy tons of pain-relief and just jump in. The idea of having no say in our largest market, and in the rules and regs of the largest trade zone on earth, is just unbearable.

John Ellis

November 19, 2011 at 08:58

Very much the pragmatic view - and none the worse for that. As a relative oldie, it makes me weep to have witnessed the lazy growth of a whining nationalism in England (Wales has benefitted hugely from the EU) to the extent that we have almost created an 'other', an enemy almost, across the channel. We joined the EU having fought our way past de Gaulle's blocking and have blown our chance to be a more important player and benefit even more. Anglo-Saxon employers seem content to want preWWII work standards in pay and hours, which runs counter to the need to employ more people rather than run a few into the ground leaving others jobless. We need a new paradigm but it not going to come from conservatives who have not left the nineteenth century.

Chris

November 19, 2011 at 18:51

Yousay the is missed but the point is that we may have to concede Euro product standards[without influence [ probably very limited already in a group of 27 - soon to be 33] but we will not be weighed down by excessive euro regulations, the CAP and billions of contributions [set to increase] to the EU for which we receive little or no benefit . Moreover you fail to point out that the EU may be a large market, but it is in structural decline in relation to Asia and elsewhere eg US Latin America where UK exports have a better prospect of growth. Growth in the EU is likely to sclerotic for decades to come- the Euro one size fits all policy plus deflation and population decline will see to that.

Chris

November 19, 2011 at 19:04

You say the pint is missed by sceptics but the point is that whilst we may have to concede Euro product standards[ our influence is probably very limited already in a group of 27 - soon to be 33] BUT we will not be weighed down by excessive european regulations, the CAP and billions of £ contributions [set to increase] to the EU for which we receive little or no benefit . Moreover you fail to point out that the EU may be a large market, but it is in structural decline in relation to Asia and elsewhere [eg US Latin America] where UK exports have a better prospect of growth. Growth in the EU is likely to sclerotic for decades to come- the Euro one size fits all policy plus deflation and population decline will see to that.In 20 years the EU will be an economic sideshow and social democratic paradise unable to pay its welfare bills without high taxation and probably less competitive than it is now [ with the possible exception of Germany ]

Sebastian Dégardin

December 2, 2011 at 22:20

I totally agree with Lord Mandelson;
my greatest wish for the UK is to have it more closely linked to the Eurozone, even if this may be hard to imagine at the moment, given the turbulences we are prone to.
But I am convinced that the EU will end up strenghtened by the crisis, so that it is in the British interest to rely on its partners on the Continent for the future.
The UK and the EU are in need of a new era of rapprochement, not the opposite.

Leave a comment

Prospect's free newsletter

The big ideas that are shaping our world—straight to your inbox. PLUS a free e-book and 7 articles of your choosing on the Prospect website.

Prospect takes your privacy seriously. We promise never to rent or sell your e-mail address to any third party.

This Month's Magazine

What are the big ideas that will shape our world in 2018? From sex to politics, our future issue looks ahead to how our lives will change. Plus: Christmas dinners, Orwell, and the Biblical origins of harassment.

Prospect was originally founded by Editor David Goodhart and Publisher Derek Coombs, as a home for intelligent debate. The magazine is owned and supported by the Resolution Group, as part of its not-for-profit, public interest activities. The aim is to tackle the big challenges confronting society, through rigorous thinking and fine writing.

Register today and access any 7 articles on the Prospect’swebsite for FREE in the next 30 days.. PLUS find out about the big ideas that will shape our world—with Prospect’s FREE newsletter sent to your inbox. We'll even send you our e-book—Writing with punch—with some of the finest writing from the Prospect archive, at no extra cost!

Prospect subscribers have full access to all the great content on our website, including our entire archive.

If you do not know your login details, simply close this pop-up and click 'Login' on the black bar at the top of the screen, then click 'Forgotten password?', enter your email address and press 'Submit'. Your password will then be emailed to you.

Thank you for your support of Prospect and we hope that you enjoy everything the site has to offer.

This site uses cookies to improve the user experience. By using this site, you agree that we can set and use these cookies. For more details on the cookies we use and how to manage them, see our Privacy and Cookie Policy.